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Pumpkin Patch to close, hundreds of jobs on the line

22 Nov, 2016 1:15pm

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Retailer Pumpkin Patch will close after no buyer was found for the company. All remaining Pumpkin Patch stores will stay open until at least the end of the year. However, Pumpkin Patch's head office is being immediately restructured and 63 people are losing their jobs this week. Gift vouchers will be honoured only while stock remains available.

After 26 years, retailer Pumpkin Patch is closing its doors after it was unable to find a buyer for the business.

The company said earlier this month that it was closing seven stores in New Zealand and 27 in Australia.

The remaining 128 Pumpkin Patch stores would stay open until at least the end of the year, before being wound down. The company's roughly 1400 staff will all be let go, with redundancies starting this week.

Pumpkin Patch's head office is being immediately restructured and 63 people are losing their jobs this week. Receiver Brendon Gibson said staff would be paid wages and holiday pay, but would not receive redundancy packages.

"All of the staff in retail stores will be paid their wages and entitlements up to the statuatory cap, and those in head office," Gibson said.

"Unfortunately there's no assets available to meet their redundancy entitlements so there won't be [redundancy packages]."

Gift vouchers will be honoured only while stock remains available.

Gibson said that without a serious expression of interest from a buyer, there was no choice but to sell all stock and wind down the business.

"Our focus since Pumpkin Patch entered receivership in October was to sell the business as a going concern. Unfortunately, while the brand is attractive the business itself ultimately grew no interest at the conclusion of the sale process," Gibson said.

"We now move to the next phase of receivership which is to sell off all stock and begin to wind down the business. This decision has not been made lightly and we acknowledge it will come as a blow to staff," he said.

"We have had approaches from a number of agencies to assist the redundant staff to find alternative employment and ensure they are aware of all support that is available," he said.

"It is too early to say when individual stores will close. Our current intention is for all stores to remain trading until the end of the year with some continuing on into January as stock diminishes. The liquidation process will likely take until the end of February to complete," he said.

Gibson said he had received interest for the Pumpkin Patch brand and would now run a process to get the most value from that asset.

First Union organisor Lisa Meto Fox said the organisation would try to ensure staff being made redundant would receive what they were owed.

"In the past workers have agreed to forgo wage increases to help the company and in return they could be short-changed on their entitlements," Fox said.

"Securing entitlements like redundancy will mean life is a little easier for the staff who are going to be put out of work. It could mean the difference between meeting rent next week or not."

A delegate for First Union said members had been consoling the office staff, many of whom were feeling "pretty lousy" after the meeting yesterday.

The company was tipped into receivership by its lenders last month and appointed voluntary administrators after failing to reinvent itself in the face of shrinking sales and too much debt.

Shortly before this, the retailer said there was virtually no value left in its equity after talks with its lender ANZ Bank New Zealand fell through.

Pumpkin Patch's debt to ANZ Bank rose to $46 million from $39.1m in the year to the end of July 2016. It posted a loss of $15.5m in the same period.

The shares have been in a trading halt since October 21, and last traded at 6 cents, valuing the retailer at $10.1m.